The majority of UK firms are now service organisations but many are operating with processes designed for product based companies. Francis X Frei [1] suggests that if service industries want to fight off their competition, they need to focus on four elements.
1. What is offered — which aspects of service do you want to deliver really well. You may say everything, but few firms can excel in every area. How can you be the cheapest company, with the highest quality service and still make money? Typically service industries need to decide what service attributes match target customers priorities. If you want to charge a premium, stay clear of customers who prioritise value for money above everything else for example.
2. How service is paid for — in service industries (staff) time is often the most expensive part of the transaction. Can you reduce the time processes take, eliminate travel, or find other ways to speed up the process? If so can you use these savings to fund enhanced services for your selected customers? One of the greatest cost savings can be in transferring work from staff to customers. This is what happens when we use a cashpoint (rather than speak to a bank employee). No customer wants to take on complicated drudge work, so when transferring work from staff to customers the most successful companies simplify and streamline processes and add additional benefits for the customer.
3. Involved employees — if you are delivering a service (rather than a product) your employees are the only people customers interact with that matters to them. Ask your frontline staff (or better still get on the front line yourself) and ask two questions. First what do staff need to be able to deliver excellent service in your strategic areas and second what motivates staff to deliver this excellent service?
4. Managed customers — if you are bringing your customers into your organisation (by for example having them carry out online transactions rather than call a call centre) how will you manage them, help them develop the necessary skills to carry out their part of your excellent service and above all make sure they want to do this work.
[1] Frei, F, X. The Four Things a Service Business Must Get Right, HBR April 2008 p 70 — 80
